Money & Moving In Together: The Finances of Love

A couple years ago, our friend Liz was on a business trip across country when she randomly ran into her long lost college sweetheart Jared. Both single – and both smitten – the two embarked on a long distance love affair on the fast track to eternal bliss. A year later, Liz took the plunge, quit her job, moved to Boulder and into Jared’s house. Could their story be more romantic? All of us were just waiting for our wedding invitations to arrive. But soon after Liz moved in, their movie-made romance turned ugly. The culprit? Money!

So: Are you madly in love and ready to take that next step by moving in together? Living together is exciting, but it’s also a HUGE step. So before diving head first into playing house, you and your partner MUST sit down and have a serious talk about money, expenses and the future of your finances!

Do You Have the Same Financial Plan?

Even if you’re married, talking about money with your partner is not easy. But just because you’re not married doesn’t mean you should avoid the topic altogether. Sharing expenses with ANYONE, let alone with someone you are establishing a home and a life with, warrants a good sit down. In fact, it should be a REQUIREMENT!

The truth is that every errand you run with your kids is an opportunity to teach them something new and sharpen their skills.

How are the bills going to be split? Who pays when you go out at night? Are you getting a place together, or is one of you moving into the other person’s home? What happens if one of you makes more money? The list continues… However, the point is: if you want to grow together as a couple, you must be able to communicate and be open to each other’s expectations on all fronts.

Keep Your Finances Separate

When I asked Liz if she thought it was a good idea for couples to open a joint bank account right away, she said: “No way”! Because she and Jared really believed that they were going to get married in the very near future, they agreed to split the big costs, but they were very loose about the rest – which got them into trouble. And to this day, there is enormous resentment over who owes who what!

Liz feels that by keeping your expenses and your money separate, not only will you feel more in control of your own financial future, but it makes money very clear until you are ready to take that next step toward a bigger commitment.

When Someone Makes More

When someone makes more than their partner, life choices and standard of living MUST be discussed. Often times, when one person can afford more than the other, “splitting” expenses becomes a more complicated situation. There is nothing wrong with the person making more money taking on more of the expenses, but that person must be WILLING and ABLE to do so without resentment. And the partner making less must be completely comfortable with the arrangement, too!

Put Your Name on the Deed

If you decide to buy a house together, then make sure that you actually do! Attorney Tom Hession has seen this mistake too many times: women agree to leave their name off the mortgage of the house for practical reasons, like a lower credit score potentially raising the interest rate of the loan. But he advises that if you are going to put money into the property in any way (via contributing to the down payment, paying the mortgage, or making improvements) you NEED to protect your interests. If you leave your name off the deed, you are seriously impairing your rights to the property. This holds true when signing a lease, as well. If you both are sharing the financial responsibility of your apartment, you should also have equal legal control!

Be Prepared to Pay

Remember ladies, even if you are splitting the bills, when you put a bill in your name, it is ultimately your responsibility. There’s absolutely no reason not to do this, but just be prepared to pay for the entire cost if things don’t work out in the end.

Avoiding the Break-Up Tit for Tat

Now, by NO MEANS are we saying that all couples who move into together will break up. But what we are saying is that communication is the KEY to a healthy relationship, and an easier break-up for those not so lucky. I had a friend in college who was so mad when she broke up with her boyfriend, she sent him a bill for half of her birth control pills for the time they were together—now that’s extreme! (Or, as some of our friends thought – extremely awesome!)

Are We Totally Unromantic?

So, how unromantic are we sounding? For those of you 20-somethings reading this, just know that at this stage of the game we’ve seen it all (did we mention our friend who charged the ex for half of the cost of her birth control pills?!) But we know that no matter what we say, you’re probably going to move in with that boyfriend anyway, so, when you do so, just make sure you take some precautions – just as you wouldn’t leave yourself, shall we say, unprotected in other intimate areas of your relationship, don’t leave your financial future to chance!